> For the complete documentation index, see [llms.txt](https://guide.dem.exchange/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://guide.dem.exchange/earn/liquidity-pools/liquidity-pools/claiming-rewards-on-demex.md).

# Earnings

Earnings for spot liquidity providers are accrued in two ways:

1. Fees earned from swap fees (spread) and maker rebates
2. Liquidity rewards derived from block rewards (when LP tokens are committed)

<div data-full-width="false"><figure><img src="https://3548599389-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MO-XZjWplLUJPNs07G8%2Fuploads%2FxpF65V63rPZDoYL4CPZD%2FScreenshot%202023-06-22%20at%202.25.40%20PM.png?alt=media&amp;token=23f03d19-6927-4de4-ba2f-e276e42ff1b0" alt="" width="563"><figcaption></figcaption></figure></div>

## Liquidity Rewards

### Overview

A portion of protocol fees and native token inflation that is captured by block rewards is allocated as incentives to liquidity pools that have been selected via on-chain governance.&#x20;

This means that liquidity providers (LPs) for these pools can receive additional rewards in addition to the fees earned via maker rebates. Rewards are distributed proportionately to the amount of liquidity provided.

#### Reward Curve

The amount earned by liquidity pools is governed by the LP reward curve and is given as a ratio of each block's rewards.

The reward curve can be found at the following API / RPC endpoint:

{% embed url="<https://api.carbon.network/carbon/liquiditypool/v1/reward_curve>" %}

#### Curve Parameter Details

* "start\_time": The time at which liquidity rewards will begin to be distributed
* "initial\_reward": The reward ratio in bps (out of each block's rewards) to be distributed to liquidity pools
* "interval": The interval in seconds before the reward ratio is reduced (from `initial_rewards`)&#x20;
* "number\_of\_reductions": The number of times that the reward should be reduced
* "reduction": The amount in bps to reduce the reward at each `interval` (as a multiplier to the current reward)
* "final\_reward": The reward after `number_of_reductions` reductions have been done
* "reductions\_made": The number of reward reductions made so far.

{% hint style="info" %}
Currently, **a static 25% of block rewards** are allocated to liquidity rewards, for 12 weeks, after which it drops to 0%.
{% endhint %}

#### **Reward Weights**

The reward weight for each pool can be found within the pool API / RPC endpoint here:

{% embed url="<https://api.carbon.network/carbon/liquiditypool/v1/pools>" %}

{% hint style="info" %}
The latest proposal on the allocation of LP reward weights can be found [here](https://commonwealth.im/carbon-protocol/discussion/11405-cip49-refresh-lp-rewards-reallocate-pool-weights).&#x20;
{% endhint %}

The rewards allocated via the above [reward curve](#reward-curve) is split based on the reward weight for each pool.

That is to say, given:

* $$Wi​$$: Reward weight of the liquidity pool $$i$$.
* $$N$$: Total number of liquidity pools.
* $$Ri​$$: Ratio of rewards for liquidity pool $$i$$.
* $$R$$: Total rewards distributed among all pools given by the above [reward curve](#reward-curve).

The reward weight $$Wi​$$ for the liquidity pool $$i$$ can be expressed as:

$$W\_i = \frac{R\_i}{\sum\_{j=1}^{N} R\_j}$$

For detailed steps on how to earn the maximum rewards, see [this walkthrough](/earn/liquidity-pools/liquidity-pools/walkthroughs/committing-liquidity-for-rewards.md). To find out how to claim your rewards, see [this guide](/earn/liquidity-pools/liquidity-pools/walkthroughs/claiming-rewards.md).


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